Judge Rules Against Alibaba in Crypto Trademark Case

UPDATE (2, May 21:57 UTC): Alibaba told CoinDesk in a statement that it would file a new motion against the Alibabacoin Foundation, saying “Alibaba Group is not affiliated with the ABBC Foundation. The court’s ruling on April 30 was with respect to jurisdiction. We will be submitting a new motion and are confident we will be able to put an end to this willful, concerted and unlawful scheme by the ABBC Foundation to exploit Alibaba Group trademarks.”

U.S. District Judge Paul Oetken rejected digital retail giant Alibaba’s trademark lawsuit against the Alibabacoin Foundation at the end of April, court filings show.

Alibaba failed to show that the District Court from the Southern District of New York has jurisdiction over the Alibabacoin Foundation, according to the ruling. The company first brought the suit early in April when it alleged that Alibabacoin was trying to mislead investors by implying that Alibaba was involved in the project somehow.

The foundation is based in the Cayman Islands, and while its website is accessible in New York state, that alone is insufficient to prove “personal jurisdiction.”

“Alibaba fails to cite a single case in which a court has concluded that an agreement with a third-party web-hosting company in New York bears an articulable nexus to a trademark infringement claim involving a website,” Oetken wrote.

The judge goes on to explain that Alibaba has not shown that any U.S.-based individual maintains the foundation’s website, which would be needed for a jurisdiction argument.

The judge further points out that some of Alibaba’s arguments would apply to securities cases, but not to a trademark suit. He also noted:

“Alibaba has failed to identify a specific economic injury in New York … nor has it alleged the existence of a New York market in which it lost actual or potential customers to Alibabacoin. To the contrary, Alibaba expressly disclaims any intention to enter the cryptocurrency market, in New York or anywhere else.”

He continued, saying “without allegations of specific, non-speculative harm in the form of actual or potential injury in a New York market for it sservices. Alibaba cannot estalbish a New York-based injury under an economic tort theory.

He concluded by releasing the temporary restraining order by Alibaba against Alibabacaoin was dissolved.

“Alibaba has not met its burden to establish a reasonable probability that the Court has personal jurisdiction over Alibabacoin,” the judge wrote.

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